"Lobbying for Globalization" (with Paola Conconi and Mathieu Parenti). Previously circulated as "Globalization For Sale", CEPR Discussion Paper 14597.
Featured in a Vox column
Abstract: We study the role of firms in the political economy of free trade agreements (FTAs). Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, we show that lobbying on FTAs is dominated by large firms engaged in international trade, which are in favor of these agreements. We develop a model of endogenous lobbying on FTAs by heterogeneous firms, which can explain why only pro-FTA “superstar” firms select into lobbying. The model also delivers predictions on the intensive margin of lobbying. In line with these predictions, we find that larger firms spend more supporting a trade agreement, and that individual firms spend more supporting agreements that generate larger gains – i.e. larger improvements in their access to foreign consumers and suppliers and smaller increases in domestic competition – and that are more likely to be opposed by politicians. Our findings suggest that, by lobbying to implement favorable legislation, “superstar” firms can further increase their global market power.
Abstract: I systematically explore the role of trade unions in the political economy of trade policy, studying both their lobbying expenditures and their campaign contributions. Using detailed information from lobbying reports filed under the Lobbying Disclosure Act, I first show that unions are the main opposing force to the ratification of free trade agreements (FTAs). Unions that are larger and operate in tradable sectors are more likely to lobby against FTAs and to spend more opposing these agreements. I then study union's PAC contributions to political parties. During the last three decades, more than 90% of unions' PAC contributions were directed to Democratic candidates. I show that this has drastically changed since Trump's presidential campaign. Linking data on campaign contributions, lobbying expenditures, and roll-call votes, I find that unions that lobbied against the ratification of FTAs started contributing more to Republican congressmen, benefitting particularly those who have taken an anti-trade stance.
"Betting on the Wrong Horse: lobbying on TPP and the 2016 U.S. presidential election" (with Moritz Hennicke)
Featured in a column of the Turin Centre on Emerging Economies (OEET), Università di Torino
Abstract: Recent trade agreements have moved beyond tariff reductions, encompassing provisions and obligations related to non-tariff issues. These aspects are often seen as the reflection of interest groups, able to manipulate and extract additional rents from the ratification of these agreements. We provide empirical evidence that corporate lobbying on trade agreements matters for corporate profits. We use the historical shock to U.S. trade policy – the non-ratification of the Trans-Pacific Partnership (TPP) – following the unexpected victory of Donald Trump in the 2016 U.S. presidential election. We find that stock prices of companies that lobbied in favor of the TPP underperformed following the election. On the intensive margin, we find a strong and positive relationship between the amount spent in lobbying and the cumulative losses of lobby- ing firms. Finally, by comparing the original TPP agreement with its newer version (CPTPP) without U.S. participation, we provide evidence that firms’ lobbying activity was related to having some specific provisions included in the agreement.
Veugelers, R., Barbiero, F. and Blanga-Gubbay, M. D. (2013) "Meeting the manufacturing firms involved in GVCs", in Veugelers, R. (2013) "Manufacturing Europe’s future", Bruegel Blueprint 21: 107-138